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HomeMy WebLinkAbout7.2 City Audit Proposal cfII DUBLZJO AGENDA STATEMENT Meeting Date: August 23, 1982 3 IC "`6/D SUBJECT : City Audit Proposals EXHIBITS ATTACHED : Audit Proposal of Bray, Burke, Waterman, Cockrill & Carter RECOMMENDATION : 1 ) Approve selection of Bray, Burke, Waterman, Cockrill and Carter as City Auditor 2) Approve concept of retaining Council audit committee on an ongoing basis. FINANCIAL STATEMENT: Total audit proposal cost will not exceed $3,200; $6,000 has been budgeted. DESCRIPTION : The City received proposals from five accounting firms to perform the City's 1981-82 financial audit, prepare the annual State Controller's report and to develop a Chart of Accounts for the City. A committee composed of Councilpersons Jeffery and Moffatt and the City Manager interviewed each firm on August 19, 1982. Factors which were considered during the interview included: experience in municipal accounting, ability and availability to communicate with the City Council and Staff, continuing education on municipal accounting and changes in State regulations impacting cities, liklihood of a longterm relationship being developed between the City and individuals directly involved in the audit and cost. After a careful review of the qualifications of each firm, it is the Audit Committee's recommendation that the City Council approve the selection of Bray, Burke, Waterman, Cockrill and Carter as the auditor for the City of Dublin. This firm's proposal was based on work being performed on a time and expense basis with fees not to exceed the following amounts: Audit of Financial Statements $1 ,600 Preparation of State Controller's Report 640 Develop Chart of Accounts 960 Total $3,200 The Committee also recommends that the City Council approve the concept of retaining the Audit Committee on a continuing basis, to facilitate communication between the auditor and the City Council throughout the year. Councilpersons Jeffery and Moffatt will answer any questions that the City Council might have regarding the selection process at -the meeting. �}� Copies To: Each firm which ITEM NO. / submitted timely } 0 BRAY,e_.E,wr-_mac a.ILL&CARTER -CERTI FIED PUBLIC ACCOUNTANTS } A : § , 4 ;, , AUDIT PROPOSAL SUBMITTED TO CITY OF DUBLIN / i I . . \/ . , 1 . . . . ,. . . ) . . . . v . . : . . 'j . .. 1 . . ,} . ] ) \( . /} . ' \ ? ; ( • BRAY, BUR, WATERMAN, COCKRILL & ARTER CERTIFIED PUBLIC ACCOUNTANTS -MA J.WATERMAN,CPA CITY CENTER BUILDING,SUITE 509 •ALD L.COCKRILL,CPA 22300 FOOTHILL BOULEVARD •RY H.CARTER,CPA HAYWARD,CALIFORNIA 94541 • OUNSEL: (415)886-6411 8 357-3200 ARLES E.BRAY,CPA OMAS F.BURKE,JR.,CPA • August 13 , 1982 Mr. Richard C. Ambrose , City Manager City of Dublin 6500 Dublin Blvd. , #218 Dublin, CA 94566 Dear Mr. Ambrose : - *We are pleased to submit a proposal to audit the financial statements of the City of Dublin for the initial period ending { June 30 , 1982. We are also pleased to submit a proposal to prepare the State Controller' s Report for the same period, and to develop a chart of accounts for the City. Our detailed proposal indicating scope of service , fees , approach to the engagement , qualifications and resumes of key personnel is attached for your review. Sincerely , BRAY,• BURKE, WATERMAN, COCKRILL & CARTER CetiPerry H. Carter Audit Partner PHC/nr • BRAY,BURKE,WATERMAN,COCKRILL& TER -CERTIFIED PUBLIC ACCOUNTANTS AUDIT PROPOSAL CITY OF DUBLIN Table of Contents Page No. Scope of Services 1 - 2 Approach to the Engagement 3 Fee 4 Qualifications 5 - 7 References • 6 8 - 9 Resumes r;. BRAY,BURKE,WATERMAN,COCKRIL .ARTER •CERTIFIED PUBLIC ACCOUNTANTS S 1 SCOPE OF SERVICES AUDIT SERVICES We propose to audit the combined and combining financial state- ments of the City of Dublin for the initial period ended June 30 , 1982. Our examination will be made in accordance with generally accepted auditing standards for the purpose of expressing an opinion on the City' s financial statements. Under generally accepted auditing standards the independent auditor has the responsibility , within the inherent limitations of the auditing process , to plan the examination to search for errors or irregularities (as defined in authoritative professional literature) that would have a material effect on the financial statements. Our search for material errors or irregularities ordinarily is accomplished by performing those auditing procedures that in our judgment are appropriate in the circumstances to form an opinion on the financial statements as a.whole. Our exam- ination, which is based on the concept of selective testing• of the data being examined is subject to the inherent risk that material errors or irregularities , if they exist , will not be de- tected. In accordance with the proposal instructions , we will deliver the report within 60 days of being notified by the City that the audit field work may begin. An exit conference will be conducted prior to the issuance of the auditors report. MANAGEMENT LETTER An essential feature of our engagement will be the review and eval- uation of the accounting records and the system of internal control . In connection with the engagement , we will be submitting to you, along with the report on the financial statements , a management letter. The management letter will communicate any material weaknesses in internal control and our recommendations thereon. Should we observe other opportunities for economies in or im- proved controls over operations , it is our practice to bring such issues to the attention of the appropriate level of management, either orally or in writing. OTHER SERVICES TO BE PERFORMED As called for in the audit proposal , we will also prepare the City ' s State Controller ' s Report in time for a timely filing. (Continued) w - � s M 1 �.?+yam BRAY,BURKEWATERMAN,COCKRILL&CARTER -CERTIFIED PUBLIC ACCOUNTANTS 2. SCOPE OF SERVICES fr OTHER SERVICES TO BE PERFORMED (Concluded) In addition we will , in conjunction with the City Manager , develop a chart of accounts for the City. The chart will , as a minimum, adhere to the requirements as set out in "Governmental Accounting, Auditing and Financial Reporting". Also , careful consideration will be given to the reporting requirements of the State Controller ' s Report , potential "Prop. 4" requirements , and future needs . • F 2 3 BRAY,BURKE,WATERMAN.COCKRI ARTER -CERTIFIED PUBLIC ACCOUNTANTS 3. APPROACH TO THE ENGAGEMENT We desire to perform the audit as efficiently as possible while providing the highest quality service. The following approach will be used to achieve a cost effective audit and timely delivery of our reports : 1) As soon as practical after our engagement to perform the audit , we will review your account- ing system procedures and internal controls. The review will determine what procedures and controls exist , and the consistency with which they are being applied. Based on our findings we will finalize our audit programs. 2) During the planning phase of the audit , we will meet with the appropriate staff and establish a time schedule setting out when we will deliver the reports , staitt field and test work, etc. Also , during this planning phase we will discuss with the staff any material changes that have taken place during the year , any areas we may wish to emphasize in the audit , accounting issues , and other matters affecting the audit. 3) We will perform all audit operations on your premises. We will not need to remove any material from your office. 4) To ensure a well planned, well performed and timely audit , two of the firm' s partners will be assigned to the engagement.. The firm' s audit partner will be responsible for the technical content of the audit, and the two partners together will share staffing and supervisory duties . We are of the opinion that having two partners assigned to the engagement will provide for the type of continuity that is required on an audit of this complexity. 5) Staff assigned to the engagement will be adequatly trained and properly supervised. The in-charge accountant that will be assigned to the engage- ment has had extensive experience in the audit of California cities and other governmental entities . BRAY,BURKE.WATERMAN,COCKRILL 8 R -CERTIFIED PUBLIC ACCOUNTANTS Q 4. FEE Our fee for the services set forth above will be based on the time required to complete the engagement . Should the time re- quired to complete the work produce a fee that is less than the maximum fee set out below, then we will pass that savings on to the City. The following schedules set out our maximum fee : Schedule 1 - Standard Hourly Rates 1981-82. Partner 62 Manager 54 Senior accountant 36 Assistant accountant 28 Clerical 13 • • Schedule 2 - Maximum Fees Audit of Fina.ncia.l. Statements $1 ,600 Preparation of State Controller ' s Report 640 Develop Chart of Accounts 960 Total Maximum Fee $3 ,200 • BRAY,BURKE,WATERMAN,COCKRILARTER -CERTIFIED PUBLIC ACCOUNTANTS 5 QUALIFICATIONS EXPERIENCE BRAY , BURKE , WATERMAN, COCKRILL & CARTER has substantial expe- rience in the governmental area. We are particularly suited to provide audit services to the governmental and non-profit sector. The complexity and variety of auditing and reporting require- ments , both financial and compliance , in the governmental area require experienced auditors . We are very proud of the depth and immediacy of our experience in this field. The following is a list of our governmental audit clients and the number of years we have served them: Total Cities : Years City of San Leandro , including • Parking Authority Redevelopment Agency Marina Concessions EDA Audit HCDA Audit 6 City of Hayward, including Sewer Enterprise Funds Redevelopment Agency Civic Center Corporation Hayward Air Terminal Revenue Sharing Funds Senior Citizens Taxi and Van-Lift Program 13 City of Livermore 14 City of Pleasant Hill 9 City of Pleasanton, including Revenue Sharing Funds Water Revenue Bonds 18 City of Marysville 1 City of Yuba City 1 Our experience in the governmental area also includes school districts and special districts . We are including this additional experience in our proposal , as we believe it further demonstrates our competence and knowledge of the governmental area in California. (Continued) i # BRAY,BURKE,WATERMAN.COCKRILARTER •CERTIFIED PUBLIC ACCOUNTANTS G QUALIFICATIONS EXPERIENCE (Concluded) • Total Years Hayward Unified School District , including Special Compliance Audits 17 Peralta Junior College District 3 San Lorenzo Unified School District 6 South County Joint Junior College District 6 Alameda County Superintendent of Schools 14 (Consisting of ten or more separate school districts each year) Alameda County Flood Control and Water Conservation District , Zone Number 7 9 Alameda County Flood Control and Water Conservation District - All Zones. 4 Hayward Area Recreation and Park District 17 . East Bay Dischargers Authority - 7 Oro Loma Sanitary District 5 Livermore Area Recreation. and Park District 4 REFERENCES The following individuals have given their permission to be con- tacted by you as a reference : Ms . Emily Wagner Director of Finance City of Pleasanton • (415) 846-3202 Mr. John O' Sullivan Finance Director City of Hayward (415) 581-2345 Mr. Phil Phillips Finance Director Dublin San Ramon Services District (415) 829-2333 PERSONNEL The partners assigned to this engagement will be Mrs. Norma Waterman, Managing Partner and Mr. Perry Carter, Audit Partner. The in-charge accountant will be Mr. Tommy Glover. (Continued) • • BRAY.BURKE.WATERMAN,COOL 8 CARTER -CERTIFIED PUBLIC ACCOUNTANTS 7. / QUALIFICATIONS PERSONNEL (Concluded) Resumes of Mrs. Waterman and Mr. Carter are attached for your . review. Mr. Glover has had substantial experience in the area of governmental accounting and served as the in-charge account- ant for the City of Pleasanton for the year ended June 30 , 1981. RESUMES Resumes are attached for your review. • al • BRAY.BURKE.WATERMAN,COCK.CARTER -CERTIFIED PUBLIC ACCOUNTANTS ._.,,. 8. MANAGING PARTNER NORMA J. WATERMAN . ,,: Mrs . Waterman earned her undergraduate degree from the Illinois Institute of Technology and graduated with a BS in Purchasing. { After graduation , she completed her accounting courses at 5. Northwestern University in Chicago. Mrs. Waterman began her career in industry with a major manufacturing firm of medical equipment where she was employed for thirteen years. She gained F valuable experience in the area of purchasing, warehousing, cost accounting and worldwide sales during this part of her career. Mrs. Waterman joined the firm over ten years ago and became a 7. partner in 1976 . She is now a senior partner in the firm and has worked in all areas of the practice. Mrs. Waterman has worked as a staff accountant , supervisor and partner-in-charge of several governmental engagements , including special dis- tricts , school districts and non-profit organizations. Areas in which Mrs . Waterman has been activel,r y involved are : • Governmental . • Non-profit organizations • Colleges and Universities • Manufacturing • Construction • Retail and wholesale • Professional corporaftion Mrs. Waterman is an Illinois C .P.A. , a California C. P.A. , a member of the California Society of C.P.A. 's and the California Society of Accountants. She is also completing work for the Golden Gate University MBA-Taxation Program. t t 31. 1 4 , 4 • 4`: BRAY.BURKE,WATERMAN,COCK CARTER -CERTIFIED PUBLIC ACCOUNTANTS 9 AUDIT PARTNER PERRY H. CARTER Mr. Carter began his public accounting career in 1969 when he joined a national CPA firm after completing his undergraduate work. Mr. Carter ' s experience also includes a tour in the governmental area where he served as Assistant Controller for the East Bay Regional Park District. He is also experienced in the area of tax and holds a MBA degree in that field from Golden Gate University. Mr. Carter returned to the national CPA firm where he was originally employed and served as audit manager until May of 1981 when he joined Bray , Burke, Waterman & Cockrill as the firm' s audit partner. Mr. Carter has served as staff accountant , senior supervisor , audit manager and audit partner on a variety of audit engage- ments with an emphasis in the governmental area. The areas in which Mr. Carter has teen actively involved are: Governmental Non-profit service and social organizations • Construction • Manufacturing • Retail and wholesale • Colleges and Universities • Mr. Carter is a member of the AICPA, California Society of C.P.A. ' s and the California Society of Municipal Finance Officers. He served as chairman of the Governmental Accounting and Auditing Committee of the East Bay Chapter of C.P.A. ' s for two years and is currently an active member. Mr. Carter parti- cipated in the committee ' s revision of "Typical Financial Statements For California Cities" as issued by the California Society of C.P.A. ' s and the League of California Cities.